[Appendix]
[Government-Sponsored Enterprises]
[From the U.S. Government Printing Office, www.gpo.gov]


    This chapter contains descriptions of the data on the Government-
sponsored enterprises listed below. These enterprises were established 
and chartered by the Federal Government for public policy purposes. They 
are not included in the Federal Budget because they are private 
companies, and their securities are not backed by the full faith and 
credit of the Federal Government. However, because of their public 
purpose, detailed statements of financial condition are presented, to 
the extent such information is available, on a basis that is as 
consistent as practicable with the basis for the budget data of 
Government agencies. These statements are not reviewed by the President; 
they are presented as submitted by the enterprises.

    --The Federal National Mortgage Association and the Federal Home 
        Loan Mortgage Corporation provide assistance to the secondary 
        market for residential mortgages.

    --The Federal Home Loan Banks assist thrift institutions, banks, 
        insurance companies, and credit unions in providing financing 
        for housing and community development.

    --Institutions of the Farm Credit System, which include the 
        Agricultural Credit Bank and Farm Credit Banks, provide 
        financial assistance to agriculture. They are regulated by the 
        Farm Credit Administration.

    --The Federal Agricultural Mortgage Corporation, under the 
        regulation of the Farm Credit Administration, provides a 
        secondary mortgage market for agricultural real estate and rural 
        housing loans as well as for farm and business loans guaranteed 
        by the U.S. Department of Agriculture.

                                


 
                  FEDERAL NATIONAL MORTGAGE ASSOCIATION

                           Portfolio Programs

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-2500-0-3-371      2006 actual   2007 est.   2008 est.
----------------------------------------------------------------------------
1131  Direct loan obligations...........
                                           ---------   ---------  ----------
1150  Total direct loan obligations.....
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........
      Disbursements:

1231    Direct loan disbursements.......
1232    Purchase of loans assets........
1251  Repayments: Repayments and 
        prepayments.....................
1264  Write-offs for default: Other 
        adjustments, net................
                                           ---------   ---------  ----------
1290    Outstanding, end of year........
---------------------------------------------------------------------------
    Note: Consistent with Government-wide practice for GSEs, information for 
2007 and 2008 was not required to be collected.

    The Federal National Mortgage Association (Fannie Mae) is a 
Government-sponsored enterprise (GSE) in the housing finance market. The 
Administration has announced a proposal to strengthen regulation of all 
the housing GSEs, including Fannie Mae.
    As a housing GSE, Fannie Mae is a Federally chartered, privately 
owned company with a public mission to provide stability and to increase 
the liquidity of the residential mortgage market and to help increase 
the availability of mortgage credit to low- and moderate-income families 
and in underserved areas. Fannie Mae engages primarily in two forms of 
business: guaranteeing residential mortgage securities and investing in 
portfolios of residential mortgages.
    The Federal Government has equipped Fannie Mae with certain 
advantages over wholly private firms in carrying out these activities. 
These include an exemption from State and local taxes (except real 
property taxes), and an exemption of its debt and mortgage securities 
from Securities and Exchange Commission registration requirements. An 
additional advantage is that the Secretary of the Treasury may purchase 
and hold up to $2.25 billion of securities issued by Fannie Mae under 
terms and conditions and at prices determined by the Secretary to be 
appropriate. Securities guaranteed and debt issued by Fannie Mae are 
solely the corporation's obligations and are not backed by the full 
faith and credit of the U.S. Government. The common stock of the 
corporation is owned by the public, is fully transferable, and trades on 
the New York, Midwest, and Pacific stock exchanges.
    Fannie Mae was established in 1938 to assist private markets in 
providing a steady supply of funds for housing. Fannie Mae was 
originally a subsidiary of the Reconstruction Finance Corporation and 
was permitted to purchase only loans insured by the Federal Housing 
Administration (FHA). In 1954, Fannie Mae was restructured as a mixed 
ownership (part government, part private) corporation. Legislation 
directed the sale of the Government's remaining interest in Fannie Mae 
in 1968 and completed the transformation to private shareholder 
ownership in 1970. Using the proceeds from the sale of subordinated 
debentures, Fannie Mae paid the Treasury $216 million for the 
Government's preferred stock, which was retired, and for the Treasury's 
interest in the corporation's earned surplus. As a result, the 
corporation was taken off the Federal Budget.
    In 1992, the Congress reaffirmed and clarified Fannie Mae's role in 
the housing finance system through charter act amendments included in 
the Federal Housing Enterprises Financial Safety and Soundness Act of 
1992 (Act). Fannie Mae's charter purposes, as amended by the Act, are: 
``to provide stability in the secondary market for residential 
mortgages; respond appropriately to the private capital market; provide 
ongoing assistance to the secondary market for residential mortgages 
(including activities relating to mortgages on housing for low- and 
moderate-income families involving a reasonable economic return that may 
be less than the return earned on other activities); and promote access 
to mortgage credit throughout the Nation (including central cities, 
rural areas, and underserved areas) by increasing the liquidity of 
mortgage investments and improving the distribution of investment 
capital for residential mortgage financing.'' For additional discussion 
and analyses of Fannie Mae, please see the Analytical Perspectives 
volume of the Budget documents.

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-2500-0-3-371

2005 actual

2006 actual

-----------------------------------------------------------------------------------------------
    ASSETS:
1101

Fund balances





      Investments in US securities:

1102

Treasury securities, par





1104

Other





      Net value of assets related to 
          direct loans receivable and 
          acquired defaulted guaranteed 
          loans receivable:

1601

Direct loans (net of discount)





1602

Federal Agencies





[[Page 1186]]

1603

Allowance for estimated uncollectible loans and interest (-)









1699

Value of assets related to direct loans





1801

Cash and other monetary assets





1803

Property, plant and equipment, net









1999

Total assets





    LIABILITIES:
2101

Accounts payable





2102

Accrued interest payable





2105

Other





2203

Debt





2204

Estimated liability for loan guarantees





2206

Pension and other actuarial liabilities





2207

Subtotal, Federal taxes payable









2999

Total liabilities





    NET POSITION:
3300

Cumulative results of operations





3300

Change in Stockholder Equity









3999

Total net position









4999

Total liabilities and net position





-----------------------------------------------------------------------------------------------

                                

                       Mortgage-Backed Securities

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-2501-0-3-371      2006 actual   2007 est.   2008 est.
----------------------------------------------------------------------------
1131  Direct loan obligations...........
                                           ---------   ---------  ----------
1150  Total direct loan obligations.....
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........
1231  Disbursements: Direct loan 
        disbursements...................
1251  Repayments: Repayments and 
        prepayments.....................
                                           ---------   ---------  ----------
1290    Outstanding, end of year........
---------------------------------------------------------------------------
    Note: Consistent with Government-wide practice for GSEs, information for 
2007 and 2008 was not required to be collected.

    According to accounting practices for private corporations, the 
mortgages in the pools of loans supporting the mortgage-backed 
securities are considered to be owned by the holders of these 
securities. Consequently, on the books of Fannie Mae, these mortgages 
are not considered assets and the securities outstanding are not 
considered liabilities. However, the concepts of the budget of the U.S. 
Government consider these mortgages and mortgage-backed securities to be 
assets and liabilities, respectively, of Fannie Mae. For the purposes of 
this document, therefore, they are presented as assets and liabilities 
in the accompanying schedules. On the schedule of Status of Direct Loans 
for mortgage-backed securities, the items labeled ``New loans'' and 
``Recoveries: Repayments and prepayments'' are budgetary terms. However, 
from Fannie Mae's perspective, these items are ``Amounts issued'' and 
``Amounts passed through to the holders of securities'', respectively.
    Financial data for Fannie Mae is not presented here because Fannie 
Mae has not provided audited financial results for 2006.

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-2501-0-3-371

2005 actual

2006 actual

-----------------------------------------------------------------------------------------------
    ASSETS:
      Net value of assets related to 
          direct loans receivable and 
          acquired defaulted guaranteed 
          loans receivable:

1601

Direct loans, gross





1603

Allowance for estimated uncollectible loans and interest (-)









1699

Value of assets related to direct loans









1999

Total assets





    LIABILITIES:
2104

Resources payable









2999

Total liabilities









4999

Total liabilities and net position





-----------------------------------------------------------------------------------------------

                                


 
                 FEDERAL HOME LOAN MORTGAGE CORPORATION

                           Portfolio Programs

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4420-0-3-371      2006 actual   2007 est.   2008 est.
----------------------------------------------------------------------------
1131  Direct loan obligations...........
                                           ---------   ---------  ----------
1150  Total direct loan obligations.....
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........
1231  Disbursements: Direct loan 
        disbursements...................
1251  Repayments: Repayments and 
        prepayments.....................
                                           ---------   ---------  ----------
1290    Outstanding, end of year........
---------------------------------------------------------------------------
    Note: Consistent with Government-wide practice for GSEs, information for 
2007 and 2008 was not required to be collected.

    The Federal Home Loan Mortgage Corporation (Freddie Mac) is a 
Government-sponsored enterprise (GSE) in the housing finance market. The 
Administration has announced a proposal to strengthen regulation of all 
the housing GSEs, including Freddie Mac.
    As a housing GSE, Freddie Mac is a Federally-chartered, shareholder-
owned, private company with a public mission to provide stability and 
increase the liquidity of the residential mortgage market, and to help 
increase the availability of mortgage credit to low- and moderate-income 
families and in underserved areas. Freddie Mac engages primarily in two 
forms of business: guaranteeing residential mortgage securities and 
investing in portfolios of residential mortgages.
    The Federal Government has equipped Freddie Mac with certain 
advantages over wholly private firms in carrying out these activities. 
These advantages include an exemption from State and local taxes (except 
real property taxes), and an exemption for its debt and mortgage 
securities from Securities and Exchange Commission registration 
requirements. An additional advantage is that the Secretary of the 
Treasury may purchase and hold up to $2.25 billion of securities issued 
by Freddie Mac under terms and conditions and at prices determined by 
the Secretary to be appropriate. Securities guaranteed and debt issued 
by Freddie Mac are explicitly not backed by the full faith and credit of 
the U.S. Government. The common stock of the corporation is owned by 
private shareholders, is fully transferable, and trades on the New York 
and Pacific stock exchanges.
    Freddie Mac was established in 1970 under the Emergency Home Finance 
Act. The Congress chartered Freddie Mac to provide mortgage lenders with 
an organized national secondary market enabling them to manage their 
conventional mortgage portfolio more effectively and gain indirect 
access to a ready source of additional funds to meet new demands for 
mortgages. Freddie Mac serves as a conduit facilitating the flow of 
investment dollars from the capital markets to mortgage lenders, and 
ultimately, to homebuyers.
    The Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 (FIRREA) significantly changed the corporate governance of Freddie 
Mac. The company's three mem

[[Page 1187]]

ber Board of Directors, which had corresponded with the Federal Home 
Loan Bank Board, was replaced with an eighteen member Board of 
Directors. In addition, FIRREA converted Freddie Mac's 60 million shares 
of non-voting, senior participating preferred stock into voting common 
stock.
    Financial data for Freddie Mac is not presented here because Freddie 
Mac has not provided audited financial results for 2006. For additional 
discussion and analyses of Freddie Mac, please see the Analytical 
Perspectives volume of the Budget documents.

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4420-0-3-371

2005 actual

2006 actual

-----------------------------------------------------------------------------------------------
    ASSETS:
1201

Investments in other securities, net





1206

Receivables, net





      Net value of assets related to 
          direct loans receivable and 
          acquired defaulted guaranteed 
          loans receivable:

1601

Direct loans, gross





1603

Allowance for estimated uncollectible loans and interest (-)









1699

Value of assets related to direct loans





1801

Cash and other monetary assets





1803

Property, plant and equipment, net





1901

Other assets









1999

Total assets





    LIABILITIES:
2101

Accounts payable





2202

Interest payable





2203

Debt





2207

Other









2999

Total liabilities





    NET POSITION:
3100

Invested capital









3999

Total net position









4999

Total liabilities and net position





-----------------------------------------------------------------------------------------------

                                

                       Mortgage-Backed Securities

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4440-0-3-371      2006 actual   2007 est.   2008 est.
----------------------------------------------------------------------------
1111  Limitation on direct loans........
1131  Direct loan obligations...........
                                           ---------   ---------  ----------
1150  Total direct loan obligations.....
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........
1231  Disbursements: Direct loan 
        disbursements...................
1251  Repayments: Repayments and 
        prepayments.....................
                                           ---------   ---------  ----------
1290    Outstanding, end of year........
---------------------------------------------------------------------------
    Note: Consistent with Government-wide practice for GSEs, information for 
2007 and 2008 was not required to be collected.

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4440-0-3-371

2005 actual

2006 actual

-----------------------------------------------------------------------------------------------
    ASSETS:
1901

Underlying Mortgages









1999

Total assets





    LIABILITIES:
2104

Resources payable









2999

Total liabilities





-----------------------------------------------------------------------------------------------

                                


 
                      FEDERAL HOME LOAN BANK SYSTEM

                         Federal Home Loan Banks

                        Status of Direct Loans (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4200-0-3-371    2006 actual      2007 est.     2008 est.
-----------------------------------------------------------------------------------------------
1131  Direct loan obligations...........   7,475,995
                                        ------------ --------------  ------------
1150  Total direct loan obligations.....   7,475,995
--------------------------------------------------------------------------------------------------
    Cumulative balance of direct loans 
        outstanding:
1210  Outstanding, start of year........     722,553
1231  Advances made to members and 
        mortgage loans purchased from 
        members.........................   7,475,995
1251  Principal collected on advances 
        and mortgage loans..............  -7,453,327
1261  Change in market value adjustments 
        associated with Statement of 
        Financial Accounting Standards 
        No. 133.........................      -7,328
                                        ------------ --------------  ------------
1290    Outstanding, end of year........     743,855
-----------------------------------------------------------------------------------------------

    The Federal Home Loan Bank System is a Government-sponsored 
enterprise (GSE) in the housing finance market. The Administration has 
announced a proposal to strengthen regulation of all the housing GSEs, 
including the Federal Home Loan Bank System.

    The Federal Home Loan Banks were chartered by the Federal Home Loan 
Bank Board under the authority of the Federal Home Loan Bank Act of 1932 
(Act). The 12 Federal Home Loan Banks (FHLBanks) are under the 
supervision of the Federal Housing Finance Board (FHFB). The common 
mission of FHLBanks is to facilitate the extension of credit through 
their members. To accomplish this mission, FHLBanks make loans, called 
advances, and provide other credit products and services to their 8,149 
member commercial banks, savings associations, insurance companies, and 
credit unions. Advances and letters of credit must be fully secured by 
eligible collateral and long-term advances may be made only for the 
purpose of providing funds for residential housing finance. However, 
``community financial institutions'' may also use long-term advances to 
finance small businesses, small farms, and small agribusinesses. 
Additionally, specialized advance programs provide funds for community 
reinvestment and affordable housing programs. All regulated financial 
depositories and insurance companies engaged in residential housing 
finance are eligible for membership. Each FHLBank operates in a 
geographic district designated by the Board and together FHLBanks cover 
all of the United States, as well as the District of Columbia, Puerto 
Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana 
Islands.

    The principal source of funds for the lending operation is the sale 
of consolidated obligations to the public. The consolidated obligations 
are not guaranteed by the U.S. Government as to principal or interest. 
Other sources of lendable funds include members' deposits and capital. 
Funds not immediately needed for advances to members are invested.

    The capital stock of the Federal Home Loan Banks is owned entirely 
by the members. Initially the U.S. Government purchased stock of the 
banks in the amount of $125 million. The banks had repurchased the 
Government's investment in full by mid-1951.

    The Act, as amended in 1989, requires each FHLBank to operate an 
Affordable Housing Program (AHP). Each FHLBank provides subsidies in the 
form of direct grants or below-market rate advances for members that use 
the funds for qualifying affordable housing projects. Each of the 
FHLBanks must set aside annually the greater of $100 million or 10 
percent of its previous year's net earnings for the AHP. The Act, as 
amended in 1999, also requires that

[[Page 1188]]

FHLBanks contribute 20 percent of net earnings annually to assist in the 
payment of interest on bonds issued by the Resolution Funding 
Corporation.

    In 2002, the Administration requested all GSEs, including FHLBanks, 
to voluntarily register their equity securities with the Securities and 
Exchange Commission (SEC). This voluntary registration is part of the 
Administration's efforts to have GSEs undergo the same scrutiny process 
as other corporate enterprises. FHFB adopted a rule on June 23, 2004 
that requires each FHLBank to register a class of its stock. All of the 
Federal Home Loan Banks complied by 2006. (Freddie Mac has failed to 
commence registration with SEC, in spite of its prior commitment to do 
so. Fannie Mae registered with the SEC effective March 31, 2003, but has 
not filed financial statements for 2005 or 2006.)

    For additional discussion and analyses of the FHLBanks, please see 
the Analytical Perspectives volume of the Budget.

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4200-0-3-371

2005 actual

2006 actual

-----------------------------------------------------------------------------------------------
    ASSETS:
      Investments in US securities:

1102

Treasury securities, net

103

102

1201

Investments in other securities, net

260,037

274,926

1206

Accounts receivable

3,246

4,186

1401

Net value of assets related to direct loans receivable

722,542

743,849

1801

Cash and other monetary assets

346

329

1803

Property, plant and equipment, net

199

208

1901

Other assets

1,447

1,890





1999

Total assets

987,920

1,025,489

    LIABILITIES:
2101

REFCORP and Affordable Housing Program

896

715

2202

Interest payable

6,029

8,061

2203

Debt issued under borrowing authority

904,945

944,039

2207

Deposit funds and other borrowings

19,235

18,210

2207

Other

12,354

8,910





2999

Total liabilities

943,459

979,935

    NET POSITION:
3100

Invested capital

44,461

45,554





3999

Total equity

44,461

45,554





4999

Total liabilities and equity

987,920

1,025,489

-----------------------------------------------------------------------------------------------
    Note: Consistent with Government-wide practice for GSEs, information for 
2007 and 2008 was not required to be collected.

                                


 
                           FARM CREDIT SYSTEM

    The Farm Credit System is a Government-sponsored enterprise that 
provides privately financed credit to agricultural and rural 
communities. The major functional entities of the system are: 1) 
Agricultural Credit Bank (ACB); 2) Farm Credit Banks (FCB); and 3) 
direct lender associations. The history and specific functions of the 
bank entities are discussed after the presentation of financial 
schedules for each bank entity. As part of the Farm Credit System (FCS), 
these entities are regulated and examined by the Farm Credit 
Administration (FCA), an independent Federal agency. The administrative 
costs of FCA are financed by assessments of system institutions and the 
Federal Agricultural Mortgage Corporation. System banks finance loans 
from sales of bonds to the public and their own capital funds. The 
system bonds issued by the banks are not guaranteed by the U.S. 
Government either as to principal or interest. The bonds are backed by 
an insurance fund, administered by the Farm Credit System Insurance 
Corporation (FCSIC), an independent Federal agency that collects 
insurance premiums from member banks to pay its administrative expenses 
and fund insurance reserves. All of the banks' current operating 
expenses are paid from their own income and do not require budgetary 
resources from the Federal Government.

                                

                        Agricultural Credit Bank

    CoBank, ACB is headquartered in Denver, Colorado and serves eligible 
cooperatives nationwide, and provides funding to Agricultural Credit 
Associations (ACAs) in two of its regions. CoBank, ACB is the only 
Agricultural Credit Bank (ACB) in the Farm Credit System. An ACB 
operates under statutory authority that combines the authorities of a 
Farm Credit Bank (FCB) and a Bank for Cooperatives (BC). In exercising 
its FCB authority, CoBank, ACB's charter limits its lending to ACAs 
located in the northeast and northwest regions of the country. As an 
entity lending to Cooperatives, CoBank is independently chartered to 
provide credit and related services nationwide to eligible cooperatives 
primarily engaged in farm supply, grain, marketing, and processing 
(including sugar and dairy). CoBank also makes loans to rural utilities, 
including telecommunications companies and it provides international 
loans for the financing of agricultural exports.

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4130-0-3-351      2006 actual   2007 est.   2008 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
1131  Direct loan obligations...........      95,437     101,162     107,737
                                           ---------   ---------  ----------
1150    Total direct loan obligations...      95,437     101,162     107,737
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........      25,122      28,764      30,476
1231  Disbursements: Direct loan 
        disbursements...................      95,436     101,162     107,737
1251  Repayments: Repayments and 
        prepayments.....................     -91,803     -99,430    -105,737
      Write-offs for default:

1263    Direct loans....................                     -20         -20
1264    Other adjustments, net..........           9
                                           ---------   ---------  ----------
1290    Outstanding, end of year........      28,764      30,476      32,456
---------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 99-4130-0-
3-351

2005 actual

2006 actual

-----------------------------------------------------------------------------------------------
    ASSETS:
      Non-Federal assets:

1201

Cash and investment securities

7,184

7,752

1206

Accrued interest receivable on loans

169

220

      Net value of assets related to 
          direct loans receivable and 
          acquired defaulted guaranteed 
          loans receivable:

1601

Direct loans, gross

25,122

28,763

1603

Allowance for estimated uncollectible loans and interest (-)

-435

-441





1699

Value of assets related to direct loans

24,687

28,322

1803

Other Federal assets: Property, plant and equipment, net

261

375





1999

Total assets

32,301

36,669

    LIABILITIES:
2104

Federal liabilities: Resources payable

675

467

      Non-Federal liabilities:

2201

Consolidated systemwide and other bank bonds

28,342

32,547

2201

Notes payable and other interest-bearing liabilities

124

300

2202

Accrued interest payable

253

372





2999

Total liabilities

29,394

33,686

    NET POSITION:
3300

Cumulative results of operations

2,907

2,983





3999

Total net position

2,907

2,983





4999

Total liabilities and net position

32,301

36,669

-----------------------------------------------------------------------------------------------

                  Statement of Changes in Net Worth (in thousands of dollars)

-----------------------------------------------------------------------------------------------
                      99-4130            2005 actual    2006 actual     2007 est.      2008 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth..........   2,869,656      2,907,259     2,982,698      3,074,000
                                        ============ ==============  ============  =============

  Capital stock and participations 
    issued..............................       6,269          5,368         1,000          1,000
  Capital stock and participations 
    retired.............................      67,534         71,242        51,113         44,590
  Net income............................     281,828        328,086       334,200        336,300
  Cash/Dividends/Patronage Distributions    -152,720       -174,335      -177,777       -171,710
  Other, net............................     -30,240        -12,438       -15,008        -22,000
                                        ------------ --------------  ------------  -------------

[[Page 1189]]


Ending balance of net worth.............   2,907,259      2,982,698     3,074,000      3,173,000
-----------------------------------------------------------------------------------------------

             Financing Activities (in thousands of dollars)

    --------------------------------------------------------------------
                    99-4130                 2005 actual     2006 actual      2007 est.      2008 est.
    --------------------------------------------------------------------
Beginning balance of outstanding system 
  obligations...........................       26,040,303      28,341,749     32,546,980      34,496,938
                                           ==============  ==============  =============  ==============

  Consolidated systemwide and other bank 
    bonds issued........................       11,221,891      11,240,664     11,915,104      12,689,586
  Consolidated systemwide and other bank 
    bonds retired.......................        9,378,220       8,853,321     10,165,146      10,658,879
  Consolidated systemwide notes, net....          311,845       1,817,888        200,000         250,000
  Other (Net)...........................          145,930               0              0               0
                                           --------------  --------------  -------------  --------------

Ending balance of outstanding system 
  obligations...........................       28,341,749      32,546,980     34,496,938      36,777,645
-------------------------------------------------------------------------------------------------------

                                

                            Farm Credit Banks

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4160-0-3-371      2006 actual   2007 est.   2008 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
1131  Direct loan obligations...........     140,542     150,395     160,184
                                           ---------   ---------  ----------
1150    Total direct loan obligations...     140,542     150,395     160,184
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........      66,801      76,184      80,948
1231  Disbursements: Direct loan 
        disbursements...................     140,541     151,043     160,858
1251  Repayments: Repayments and 
        prepayments.....................    -131,156    -146,279    -155,400
      Write-offs for default:

1263    Direct loans....................          -2
1264    Other adjustments, net..........
                                           ---------   ---------  ----------
1290    Outstanding, end of year........      76,184      80,948      86,406
---------------------------------------------------------------------------
    Note.--Loans outstanding at end of year do not include nonaccrual 
loans and sales contracts.

    The Agricultural Credit Act of 1987 (1987 Act) required the Federal 
Land Banks (FLBs) and Federal Intermediate Credit Banks (FICBs) to merge 
into a Farm Credit Bank (FCB) in each of the 12 Farm Credit districts. 
FCBs operate under statutory authority that combines the prior 
authorities of a FLB and of a FICB. No merger occurred in the Jackson 
district in 1988 because the FLB of Jackson was in receivership. 
Pursuant to section 410(e) of the 1987 Act, as amended by the Farm 
Credit Banks Safety and Soundness Act of 1992, FICB of Jackson merged 
with FCB of Columbia on October 1, 1993. Mergers and consolidations of 
FCBs across district lines that began in 1992 have continued to date. As 
a result of this restructuring activity, 4 FCBs, headquartered in the 
following cities, remain: AgFirst FCB, Columbia, South Carolina; 
AgriBank FCB, St. Paul, Minnesota; U.S. AgBank, FCB, Wichita, Kansas; 
and FCB of Texas, Austin, Texas.
    FCBs serve as discount banks and as of October 1, 2006 provided 
funds to 9 Federal Land Credit Associations (FLCA) and 86 Agricultural 
Credit Associations (ACAs). These direct lender associations, in turn, 
make short-term production loans and long-term real estate loans to 
eligible farmers and ranchers, and their cooperatives; farm-related 
businesses; and rural homeowners. FCBs can also lend to local financing 
institutions, including commercial banks, as authorized by the Farm 
Credit Act of 1971, as amended.
    All the capital stock of FICB's, from organization in 1923 to 
December 31, 1956, was held by the U.S. Government. The 1956 Act 
provided a long-range plan for the eventual ownership of the credit 
banks by the production credit associations and the gradual retirement 
of the Government's investment in the banks. This retirement was 
accomplished in full on December 31, 1968. The last of the Government 
capital that had been invested in FLB's was repaid in 1947. 

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 99-4160-0-
3-371

2005 actual

2006 actual

-----------------------------------------------------------------------------------------------
    ASSETS:
      Non-Federal assets:

1201

Cash and investment securities

19,513

23,353

1206

Accrued Interest Receivable

581

819

      Net value of assets related to 
          direct loans receivable and 
          acquired defaulted guaranteed 
          loans receivable:

1601

Direct loans, gross

66,801

76,185

1603

Allowance for estimated uncollectible loans and interest (-)

-19

-4





1699

Value of assets related to direct loans

66,782

76,181

1803

Other Federal assets: Property, plant and equipment, net

321

423





1999

Total assets

87,197

100,776

    LIABILITIES:
2104

Federal liabilities: Resources payable

397

386

      Non-Federal liabilities:

2201

Consolidated systemwide and other bank bonds

80,993

93,939

2201

Notes payable and other interest-bearing liabilities

368

437

2202

Accrued interest payable

592

884





2999

Total liabilities

82,350

95,646

    NET POSITION:
3300

Cumulative results of operations

4,847

5,130





3999

Total net position

4,847

5,130





4999

Total liabilities and net position

87,197

100,776

-----------------------------------------------------------------------------------------------

                  Statement of Changes in Net Worth (in thousands of dollars)

-----------------------------------------------------------------------------------------------
                      99-4160            2005 actual    2006 actual     2007 est.      2008 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth..........   4,520,633      4,846,675     5,129,876      5,347,437
                                        ============ ==============  ============  =============

  Capital stock and participations 
    issued..............................     237,099        223,860        70,342        102,225
  Capital stock and participations 
    retired.............................     118,560        108,125             0              0
  Surplus Retired.......................       4,257          2,462             0              0
  Net income............................     521,660        503,366       509,823        538,784
  Cash/Dividends/Patronage Distributions    -286,298       -349,463      -353,232       -363,159
  Other, net............................     -23,602         16,025        -9,372        -17,863
                                        ------------ --------------  ------------  -------------
Ending balance of net worth.............   4,846,675      5,129,876     5,347,437      5,607,424
-----------------------------------------------------------------------------------------------

             Financing Activities (in thousands of dollars)

    --------------------------------------------------------------------
                    99-4160                 2005 actual     2006 actual      2007 est.      2008 est.
    --------------------------------------------------------------------
Beginning balance of outstanding system 
  obligations...........................       71,077,982      80,993,251     93,938,983      99,597,895
                                           ==============  ==============  =============  ==============

  Consolidated systemwide and other bank 
    bonds issued........................       37,670,028      33,379,481     33,097,334      35,106,879
  Consolidated systemwide and other bank 
    bonds retired.......................       28,143,701      22,985,482     28,063,935      29,630,728
  Consolidated systemwide notes, net....          383,675       2,551,733        625,513         667,335
  Other, net............................            5,267               0              0               0
                                           --------------  --------------  -------------  --------------

Ending balance of outstanding system 
  obligations...........................       80,993,251      93,938,983     99,597,895     105,741,381
-------------------------------------------------------------------------------------------------------

                                

                Federal Agricultural Mortgage Corporation

                              (Farmer Mac)

    Farmer Mac is authorized under the Farm Credit Act of 1971 (Act), as 
amended by the Agricultural Credit Act of 1987, to create a secondary 
market for agricultural real estate and rural home mortgages. The Farmer 
Mac title of the Act was amended by the 1990 farm bill to authorize 
Farmer Mac to purchase, pool, and securitize the guaranteed portions of 
farmer program, rural business, and community development loans 
guaranteed by the United States Department of Agriculture (USDA). The 
Farmer Mac title was further amended in 1991 to clarify Farmer Mac's 
authority to issue debt obligations, provide for the establishment of 
minimum capital standards, establish the Office of Secondary Market 
Oversight at the Farm Credit Administration (FCA), and expand the 
agency's rulemaking authority. Most recently, the Farm Cred

[[Page 1190]]

it System Reform Act of 1996 (1996 Act) amended the Farmer Mac title to 
allow Farmer Mac to purchase loans directly from lenders and to issue 
and guarantee mortgage-backed securities without requiring that a 
minimum cash reserve or subordinated (first loss) interest be maintained 
by poolers as had been required under its original authority. The 1996 
Act expanded FCA's regulatory authority to include provisions for 
establishing a conservatorship or receivership, if necessary, and 
provided for increased core capital requirements at Farmer Mac phased in 
over three years.
    Farmer Mac operates through two core programs, ``Farmer Mac I,'' 
which involves mortgage loans secured by first liens on agricultural 
real estate or rural housing (qualified loans), and ``Farmer Mac II,'' 
which involves the guaranteed portions of USDA guaranteed loans. Farmer 
Mac operates by: i) purchasing, or committing to purchase, newly 
originated or existing qualified loans or guaranteed portions from 
lenders; ii) purchasing ``AgVantage'' bonds backed by qualified loans or 
guaranteed portions from lenders; and iii) exchanging qualified loans or 
guaranteed portions for guaranteed securities. Loans purchased by Farmer 
Mac are aggregated into pools that back Farmer Mac guaranteed securities 
which are held by Farmer Mac or sold into the capital markets. Farmer 
Mac is intended to attract new capital for financing qualified loans and 
guaranteed portions, foster increased long-term, fixed-rate lending, and 
provide greater liquidity to agricultural and rural lenders.
    Farmer Mac is governed by a 15 member Board of Directors. Ten Board 
members are elected by stockholders, including five by the Farm Credit 
System and five by commercial lenders. Five are appointed by the 
President, subject to Senate confirmation.

                                Financing

    Financial support and funding for Farmer Mac's operations come from 
several sources: sale of common and preferred stock; issuance of debt 
obligations; and net income. Under procedures specified in the Act, 
Farmer Mac may issue obligations to the U.S. Treasury in a cumulative 
amount not to exceed $1.5 billion to fulfill its guarantee obligations.
    As of September 30, 2006, Farmer Mac's core capital exceeded 
statutory requirements. Additionally, Farmer Mac's regulatory capital 
(core capital plus the allowance for loan losses) exceeded the amount of 
required regulatory capital as determined by the risk-based capital 
rule, with which Farmer Mac was required to be in compliance on May 23, 
2002.

                               Guarantees

    Farmer Mac provides a guarantee of timely payment of principal and 
interest on securities backed by qualified loans or pools of qualified 
loans. These securities are not guaranteed by the United States, and are 
not ``government securities''.
    Farmer Mac is subject to reporting requirements under securities 
laws and its guaranteed mortgage-backed securities are subject to 
registration with the Securities and Exchange Commission under the 1933 
and 1934 Securities Acts.

                               Regulation

    Farmer Mac is Federally regulated by FCA, acting through its Office 
of Secondary Market Oversight (OSMO). FCA is responsible for the 
supervision, examination of, and rulemaking for Farmer Mac.

             Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4180-0-3-351      2006 actual   2007 est.   2008 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on commitments:
2111  Limitation on guaranteed loans....
2131  Guaranteed loan commitments.......       2,907
                                           ---------   ---------  ----------
2150    Total guaranteed loan 
          commitments...................       2,907
----------------------------------------------------------------------------

    Cumulative balance of guaranteed loans 
                outstanding:
2210  Outstanding, start of year........       5,126       7,058       7,058
2231  Disbursements of new guaranteed 
        loans...........................       2,907
2251  Repayments and prepayments........        -975
                                           ---------   ---------  ----------
2290    Outstanding, end of year........       7,058       7,058       7,058
----------------------------------------------------------------------------

    Memorandum:
2299  Guaranteed amount of guaranteed 
        loans outstanding, end of year..         901
---------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 99-4180-0-
3-351

2005 actual

2006 actual

-----------------------------------------------------------------------------------------------
    ASSETS:
      Non-Federal assets:

1201

Investment in securities

1,594

1,896

1206

Receivables, net

41

56

      Net value of assets related to 
          direct loans receivable:

1401

Direct loans receivable, gross

2,140

2,084

1402

Interest receivable

45

52





1499

Net present value of assets related to direct loans

2,185

2,136

1801

Other Federal assets: Cash and other monetary assets

438

805





1999

Total assets

4,258

4,893

    LIABILITIES:
      Non-Federal liabilities:

2201

Accounts payable

47

34

2202

Interest payable

24

26

2203

Debt

3,931

4,554

2204

Liabilities for loan guarantees

20

34





2999

Total liabilities

4,022

4,648

    NET POSITION:
3300

Invested capital

236

245





3999

Total net position

236

245





4999

Total liabilities and net position

4,258

4,893

-----------------------------------------------------------------------------------------------
